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Submitted by Econophile
The Federal National Mortgage Association, fondly known as Fannie Mae, lost another $11.5 billion in the first quarter, its twelfth quarterly loss in a row, and is asking the taxpayers for another $8.4 billion to bail it out. According to the Wall Street Journal article, the company has lost $148 billion or about double the profits it has made in the last 35 years. This cute couple, Fannie Mae and Freddie Mac (the Federal Home Loan Mortgage Corporation), have cost taxpayers about $145 billion from the collapse of the housing bubble.
As you know the government has agreed to backstop these companies by guaranteeing their losses. What were quasi-governmental entities are now clearly labeled as government enterprises which is what they always were. Fannie, Freddie, and the Federal Housing Administration, which isn't given a cute nickname, guaranteed 96.4% of all mortgages made in America in Q1 2010. Fannie and Freddie have about $5.5 trillion in mortgage assets.
Despite their losses, the firms are helping to stabilize the housing market. ... The companies also play a central role in the Obama administration's loan-modification effort designed to avert foreclosures.
But, as the Bloomberg article on this story points out, foreclosures have increased:
Even with the assistance, Fannie Mae increased foreclosures to almost 62,000 homes from about 47,000 in the prior quarter, according to the filing. The company’s foreclosure rate increased and its inventory of homes grew from $8.5 billion to $11.4 billion during the first quarter.
Fannie and Freddie: Can We Finally Admit the New Deal Failed?
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